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Mississippi Basic Business Taxes

Area Development Research Desk

Corporate Taxes & Incentives Guide

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Income Tax
In Mississippi, corporate income is subject to a state income tax. Mississippi income tax rates are:

3% on the first $5,000 of taxable income

4% on the next $5,000 of taxable income

5% on remaining taxable income

Unless a company is taxable in another state, Mississippi corporate income tax is based on the company’s net taxable income. Income tax for multi-state corporations is calculated by determining a Mississippi-to-total-company ratio that is applied to the company’s net business income. For manufacturers, income tax is apportioned using a three-factored approach based on property, payroll and sales in Mississippi versus everywhere.

Sales & Use Tax
The general retail sales tax rate in Mississippi is 7 percent.

Non-production manufacturing equipment and machinery is taxed at 7 percent. Manufacturing equipment and machinery is taxed at 1.5 percent. Electricity and fuel used in the manufacturing process and manufacturers’ raw materials are exempt from sales tax.

A contractor’s tax is assessed on the construction of commercial real property in Mississippi. Contractor’s tax is calculated as 3.5 percent of a contractor’s gross receipts from the construction. Contractor’s tax has no exemptions, but the contractor is allowed to purchase all component building materials exempt from sales tax.

Manufacturers, custom processors and certain other businesses are eligible to receive a one-half or full sales and use tax exemption on eligible machinery and equipment purchases and building materials used in the construction of a new or expanded facility. The amount of the exemption depends on the county in which the facility locates. To receive this exemption, the materials must be purchased directly by the business.

Certain individual revenue bond-financed properties are fully exempt from sales taxes on purchased construction materials and machinery and equipment, provided that these purchases are made directly by the eligible business.

Property Tax
Counties and municipalities levy a property tax on real and tangible personal property in Mississippi. Mississippi does not have a state property tax. Generally, property is assessed at 15 percent of true value. This assessed value is then multiplied by the millage rate, which is set by each city and/or county, to determine a business’s annual tax liability.

State Contact:Billy Klauser
Director of Financial Resources
Mississippi Development Authority
601.359.5769bklauser@mississippi.orgIncentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated October 2015.